Trump’s Tariff Announcements and Global Reactions: A Comprehensive Guide

Trump tariffs war: United States President Donald Trump on April 2 unveiled a comprehensive tariff policy, imposing at least a 10 per cent duty on nearly all goods entering the US. Trump, 47th President of the US, announced the so called ‘reciprocal tariffs’ from the Rose Garden at the White House, and said that these tariffs are aimed at correcting trade imbalances and bolstering American industries.

What Are Trump’s Tariffs?

Reciprocal tariffs are tax or trade restrictions that one country places on another in response to similar actions taken by that country. While giving details on reciprocal tariffs, Donald Trump said, “We will charge them approximately half of what they are and have been charging us, so the tariffs will be not a full reciprocal. I could have done that, I guess, but it would have been tough for a lot of countries and we didn’t want to do that.”

However, a Bloomberg report noted that the Donald Trump's administration has calculated new tariffs primarily based on existing trade balances, instead of his pledge to match the tariff rates and other trade barriers from trading partners.

As per Donald Trump's announcement, the tariffs are as follows:

• 10% on most imports, higher for ‘worst offenders’
• A new 10% tariff will apply to practically all imported goods.
• Countries with large trade deficits with the US will face even higher rates.
• Mexico and Canada are exempt, except for non-compliant goods, which will still be taxed at 25%.
• The baseline 10% tariff takes effect Saturday at 12:01 am ET.
• Around 60 countries will be charged tariffs equal to half the rate they impose on U.S. goods.
• The targeted tariffs for "worst offenders" will go into effect at 12:01 am ET on April 9.

How do tariffs work? Who pays?

Making the announcement, Donald Trump called it “one of the most important days” in American history and describes the move akin to the “declaration of economic independence”. He added that the tariff revenue will be used to reduce taxes and pay down national debt.

So, how do tariffs work? According to Robert Gulotty, an associate professor in the Department of Political Science, at the University of Chicago, tariffs have three main objectives — raise funds for the imposer (US in this case); redistribute money from consumers towards domestic producers (by nature of being imposed on imports); and “strategically” shifting global prices.

So, who ultimately pays for these tariffs? According to Rodrigo Adão, an associate professor of economics at the University of Chicago Booth School of Business, invariably, “impact of these tariffs was borne by consumers and firms inside the United States”.

He cited past research and data from the trade war in 2018, adding that American consumers will end up shelling more money for goods that are imported.

What is Section 232? What Are the National Security Implications for the US?

According to information on the US government's official Commerce Department website, “Section 232 of the Trade Expansion Act of 1962 authorises the Secretary of Commerce to conduct comprehensive investigations to determine the effects of imports of any article on the national security of the United States.”

Section 232 investigations include consideration of:

• domestic production needed for projected national defense requirements;
• domestic industry’s capacity to meet those requirements;
• related human and material resources;
• the importation of goods in terms of their quantities and use;
• the close relation of national economic welfare to U.S. national security;
• loss of skills or investment, substantial unemployment and decrease in government revenue; and
• the impact of foreign competition on specific domestic industries and the impact of displacement of any domestic products by excessive imports.

Notably, earlier in March, Donald Trump imposed 25 per cent tariffs on steel and aluminium articles, and automobiles and auto parts. This was done under the aegis of Section 232. The White House release in February said: “President Trump is taking action to end unfair trade practices and the global dumping of steel and aluminum.”

Timeline of Trump's Tariff Announcements

Here is a timeline of Trump tariffs announced by the President since he took office on January 22

• January 20: Donald Trump took office on January 20 and vowed to impose tariffs and taxes on other countries to revamp US trade and make Americans rich.
• First round of tariffs: Between February 1 and February 4, Trump signed an executive order imposing tariffs on goods from Mexico, Canada, and China. China was hit with a 10 per cent tariff, while Mexico and Canada faced 25 per cent tariffs each. All three countries announced retaliatory tariffs in response, which prompted Trump on February 3 to pause the tariff decision for Mexico and Canada for 30 days. On February 4, a 10 per cent tariff on Chinese imports to the US took effect.
• February 10: Trump announced his plans to impose 25 per cent tariffs on steel and aluminium imports taking effect on February 10
• February 13: Donald Trump announced plans for reciprocal tariffs just before his meeting with Prime Minister Narendra Modi, who committed to increase bilateral trade between New Delhi and Washington DC. Trump signalled his tariff plans on India and confirmed a 25 per cent levy on European countries.
• Late February to early March: On February 25, Trump asked the Commerce Department to assess whether tariffs on imported copper are necessary. On March 1, he directed the commerce ministry to assess if tariffs on lumber and timber imports were needed. On March 4, the US imposed steep tariffs at a 25 per cent rate on Canada and Mexico, and 10 per cent on China.
• March 5: On March 5, Donald Trump approved a one-month exemption from tariffs on goods imported from Mexico and Canada.
• Other March tariffs: Following the US tariff hike, China retaliated with a 15 pr cent levy on on US products, including chicken, pork, soybeans, and beef. Trump on March 12 increased the tariff rates of steel and alimimium imports to 25 per cent, which invoked a counter-tariff decision from EU. On March 13, Trump threatened with a 200 per cent tariff on wine and champagne imports from European countries. The US President on March 24 announced a 25% tariff on countries purchasing oil or gas from Venezuela, effective April 2.
• March 26, Auto tariffs: The auto tariffs imposed by Trump was announced on March 26, under which he proposed a 25 per cent tariff on all automobile imports.
• April 2, Trump hits India with 26 per cent tariffs: Labelled as America's “Liberation Day”, Trump went ahead with a slew of tariffs on almost all nations. India was hit with a 26 per cent tariff, among the highest in the world.

The Trump Tariff Charts and Lists

President Donald Trump in his April 2 speech revealed a chart with revised tariffs that would come into effect on almost all countries including India. He announced that at least 10% reciprocal tariffs would be levied on almost all goods being imported into America. Here is an explainer on who got what tariffs.

Trump Reciprocal Tariff Chart Explained

Trump showed a chart containing the tariffs imposed on 184 nations. He unveiled particularly stinging tariffs on major trade partners China and the European Union on what he called "Liberation Day."

Trump reserved some of the heaviest blows for what he called “nations that treat us badly.”

That included an additional 34 per cent on goods from China - bringing the new added tariff rate there to 54 per cent. The figure for the European Union was 20 per cent, 26 per cent on India and 24 per cent on Japan. For the rest, Trump said he would impose a "baseline" tariff of 10 per cent, including Britain.

The Office of the US Trade Representative on Monday provided an encyclopedic list of foreign countries' policies and regulations it regards as barriers, calling out India's customs barriers, import curbs and licenses, alongside high tariffs. The USTR report released Monday on foreign trade barriers listed import bans and restrictions, product registration requirements, and technical and sanitary barriers among the issues.

In another report on Wednesday, the USTR said that reciprocal tariff rates range from 0 per cent to 99 per cent, with unweighted and import-weighted averages of 20 per cent and 41 per cent.

Here is the full USTR report released Wednesday.

Trump Tariffs: Proposed vs actual reciprocal tariffs

Full Trump Tariff List by Country and Product

Here is a list of tariffs that have been already implemented

• Steel and Aluminium products: 25% tariff on India and other countries
• Automobile imports: 25% tariff from all countries
• Canada: 25% tariffs on Canadian products including maple syrup
• Mexico: 25% tariffs on Mexican products including agricultural goods

Global Responses to Trump's Tariffs

India's Ministry of Commerce said in a statement that it is carefully examining the implications of the tariffs. “The US President issued an Executive Order on Reciprocal Tariffs imposing additional ad-valorem duties ranging from 10% to 50% on imports from all trading partners. The baseline duty of 10% will be effective from April 05, 2025, and the remaining country-specific additional ad valorem duty will be effective from April 09, 2025. The additional duty on India, as per Annex I of the Executive Order, is 27 per cent,” the commerce ministry said.

On Thursday, China called on the United States to cancel its latest tariffs immediately and vowed to take countermeasures to safeguard its economy. “China firmly opposes this and will take countermeasures to safeguard its own rights and interests,” it said.

Sri Lanka warned that the announcement would threaten thousands of jobs in the country. “The tariff level is extremely high relative to our regional competitors,” said Yohan Lawrence, head of the Joint Apparel Association Forum (JAAF).

“As the global trade war has become a reality, the government must pour all its capabilities to overcome the trade crisis," Reuters quoted South Korean acting President Han Duck Soo as saying.

“The (Trump) administration's tariffs have no basis in logic and they go against the basis of our two nations' partnership. This is not the act of a friend. Today's decision will add to uncertainty in the global economy and it will push up costs for American households," said Australian Prime Minister Anthony Albanese.

EU and UK Response to Trump's Trade Measures

European Commission President Ursula von der Leyen called Trump's reciprocal tariffs a major blow to the world economy. “We are already finalising the first package of countermeasures in response to tariffs on steel,” she said.

Meanwhile, the United Kingdom said it believed a trade deal with the United States was close as it sought to soften the impact of Trump tariffs. London said that decision vindicated its approach of trying to strike a new economic partnership with the US, rather than meeting fire with fire.

Britain's business minister Jonathan Reynolds said the country, as an outward-facing economy, was “exposed not just to decisions between ourselves and the United States, but that wider global environment”.

Why No Tariffs on Russia?

Interestinly, Russia was not a part of the chart that the White House unveiled on Wednesday. When asked about the same, White House press secretary Karoline Leavitt told Axios that the omission of Russia was due to US sanctions that have been already imposed on the country, adding that the Vladimir Putin-led nation has sanctions that “preclude any meaningful trade”.

FAQs About Trump’s Tariff Policies

1. Who pays for tariffs — consumers or countries?

According to Rodrigo Adão, an associate professor of economics at the University of Chicago Booth School of Business, invariably, “impact of these tariffs was borne by consumers and firms inside the United States”.

2. Are Trump’s tariffs still active today?

Yes, Trump's auto tariffs have been implemented since April 2. His other tariffs on Canada, China and more countries have been already in place. According to reports, the new reciprocal tariffs will become active on April 5 and April 9.

3. What’s the difference between tariffs and sanctions?

Tariffs have three main objectives — raise funds for the imposer (US in this case); redistribute money from consumers towards domestic producers (by nature of being imposed on imports); and “strategically” shifting global prices. In contrast, sanctions are intended to shut down imports or exports to a country by imposing trade restrictions or shutting down trade.

4. How did farmers and manufacturers react?

The American Farm Bureau Federation has expressed concerns that increased tariffs will threaten the economic sustainability of farmers. Meanwhile, the National Farmers Union has expressed that “American family farmers and ranchers will bear the brunt of this global trade war”. Jay Timmons, president and CEO of the National Association of Manufacturers called the tariffs “complicated”.